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Zimplow Q1 performance ahead of last year

25 May, 2018 - 07:05 0 Views
Zimplow Q1 performance ahead of last year Minister of Industry and Commerce Mike Bimha (second from left) toured Zimplow in 2016. — (Picture by Eliah Saushoma)

eBusiness Weekly

Enacy Mapakame Business Writer
Agriculture and mining implements manufacturer, Zimplow’s revenue for the four months to April 2018 increased by 25 percent over the same period last year, driven by strong demand for its products due to Government’s Command Agriculture programme.

Group chief executive Mark Hulett told shareholders on Wednesday that Zimplow started the year on a good note in respect of both the top-line and bottom-line compared to the comparable prior year period.

“A general good performance at Barzem and Farmec has resulted in the group’s profit position running materially ahead of last year,” he said.

All units performed better than last year except for Mealie Brand while Farmec had the best performance during the period under review and was ahead of comparable prior year period.

Tractors sold during the four months under review at Farmec were 76 percent ahead of last year while hours sold increased by 46 percent, boosted by the Command Agriculture programme. However, implements sales were 7 percent lower than same period last year.

At Barzem revenue increased 16 percent compared to same period last year while parts sales jumped 150 percent.

Service hours sold also increased by 46 percent compared to the same period last year as the unit utilised its foreign currency capacity, which was created towards end of last year.

Prior to this, the unit was significantly constrained by foreign currency shortages.

“As a result the business has swung from a loss making position to a profit position for the period under review,” said Hulett.

Management is upbeat the Government’s thrust on infrastructure projects as well as growth in mining, particularly gold production will further boost business going into the second half of the year.

Powermec recorded modest growth in generator sales. Beginning of the year, the unit managed to establish a direct relationship with Perkins, which in the past used to come through a third party.

CT Bolts had a good performance after it contained costs and had a 3 percent growth in sales volumes to 70,3 tonnes of mild steel bolts.

Nails sold also increased by 8 percent, although high tensile bolts were 3 percent below prior year comparable period as the unit struggled to penetrate the informal market due to cash shortages.

At Mealie Brand, Hulett said the group’s focus was on production with emphasis on cost containment to ensure the unit meets demand for both domestic and export market.

Hulett said the unit had already started meeting demand for plough and components following commencement of tobacco selling season.

The unit has already exceeded the target for May. This is expected to offset the 18 percent sales decline recorded in the opening four months of the year.

Similarly, export implements sales orders, which came in the first three months of the year, are expected to come rather in the second quarter of the year with customer deliveries expected to start in June.

The unit renewed its thrust in production of hoes following reduction in supply of the imported hoes. Resultantly, there was an 81 percent increase in volumes of hoes sold.

Management remains upbeat the positive sentiment on the market will remain throughout the year, which should see Zimplow’s earnings performance ahead of prior year.

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